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AT&T intensifies assault on the Net

AT&T is expanding its Internet presence with Web hosting and is even considering Net telephony.

Not satisfied with just providing dial-up Internet access, AT&T has launched a Web-hosting service for businesses and is even considering offering Internet telephony through its WorldNet service.

AT&T's endorsement yesterday of Internet telephone service came as a surprise because it could put increasing pressure on the company's flagship telecommunications business as users begin to exploit the Net for low-cost, long distance phone calls. Internet telephones, such as Quarterdeck's WebTalk and VocalTec's Internet Phone, allow long distance calls over the Internet for the price of a call to a local Internet service provider.

WorldNet customers can already use Internet telephones, but AT&T could distribute software that would make Net telephony a standard feature. "Anyway we can make communications better for our customers," said Tom Evslin, AT&T's vice president for WorldNet. "To make a good phone call over the Internet, you'd like to get priority handling."

AT&T could also offer a special category of service for applications that depend on real-time communications such as videoconferencing and audio or video streaming, as well as telephony.

Confirming AT&T's position on the legality of Internet telephony, Evslin also unequivocally condemned a recent petition by a coalition of smaller long distance carriers urging the Federal Communications Commission to ban Internet telephones on the basis of unfair competition.

But AT&T's Net telephony plans remain in the extremely tentative stage. More concretely, AT&T spin-off Lucent Technologies has announced a different kind of Internet telephone, the Definity PC Console. The Console is a Windows application for receptionists and call centers that helps manage phone calls and Net access connections. Available immediately, the Console costs $4,400.

AT&T also expanded its Internet offerings yesterday with the launch of AT&T Easy World Wide Web Services, a hosting service originally announced last November.

AT&T Easy World Wide Web Services is part of a growing breed of Web-hosting services that allow businesses to out-source management of sites, including hardware, software, and high-speed Net connections. BBN Planet, UUNet Technologies, and USWeb all offer such services.

In this market, AT&T already has a built-in advantage. The company is targeting merchants with 800 and 888 toll-free numbers, a vast community that AT&T already serves through its telecommunications operations.

As with its WorldNet service, which includes five free hours of Internet access per month for AT&T long distance customers, the company is giving its 800 and 888 clients a price cut on Web hosting. Those customers will pay $500 per month for hosting up to 100MB of files and for up to 300MB of data downloaded by customers. Additional storage space and data downloads cost more.

Customers not using toll-free numbers will pay the same price for a promotional period ending July 1; after that, the cost will be $600 per month. All hosting-service customers are required to pay a $1,500 one-time registration fee.

Those who sign up for the hosting service also will receive assistance designing their Web sites, automatic domain name registration, Microsoft's FrontPage HTML editing tool, bandwidth on demand, and 12-hour daily telephone support.

Although AT&T is targeting its existing 800 and 888 customers with promotional pricing, its services are still more expensive than some comparable offerings. BBN Planet, for example, offers its Web Advantage Silver hosting service, including 60MB of disk storage and 300MB of data downloads, for a one-time fee of $495 and $295 per month.

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